Football Transfer Economics

Football Transfer Economics

By Pete

Reading the ever more acrimonious debates over Arsenal’s summer transfer dealings (or lack of) has got me thinking a little more deeply over how the transfer market works – and whether the different participants are behaving optimally in a rational sense.

To whit, I believe the following factors in terms of transfer strategy are not always properly considered:

A Pound Today

The key concept is: will a pound today be worth more or less in the future in terms of purchasing power? With hindsight, it is clear that player inflation has built consistently over recent years – but will that trend continue?

If you believe that FFP and European economic difficulties have to have an impact, together with specific proposals such as Spanish attempts to have a more equitable TV money split (very bad news for Real Madrid and Barcelona) and the proposed French top-rate tax increase to 75%, then the best strategy is to hold off buying big as your pound tomorrow will be worth more than your pound today. Conversely, if you think the football bubble will continue to inflate (possible given the Premier League’s global appeal) then you should spend the money now. Please note that these considerations are independent of general inflation and interest rates.

One also needs to consider revenue growth, or otherwise – this will also impact the relative value of your pound tomorrow.

Deferred Gratification

Is it really worth blowing your one-time cash pile on 2 to 3 players that will move you from being 15 points behind the champions to 5 points behind? Does it not make more sense to hold on for a couple more years and then buy really big and actually win the thing? Why waste a lot of money just to finish 2nd rather than 4th?

– Age: Players typically peak between 24 and 30. As most contracts are 5 years (so would need to sell after 3 to avoid significant contract depreciation – see below), a 24 year old will have significant resale value after 3 years while a 27 year old does not. A 21 year old is potentially even better – except that you can’t be sure of how good he will become.

– Contract: As a player’s contract runs down the resale value dwindles at an accelerating rate – particularly in the last two years.

From an age perspective, you should really try to avoid paying a big fee for anyone over 25, 26 tops. Jovetic is 23, Bale 24, Higuain 25, Suarez 26 and Rooney 28 (I think). It is laughable for Liverpool to compare Bale with Suarez – even if the players are comparable (…); Suarez being 2 years older is significant. My sense is that Arsenal are already offering over the odds for Suarez. If Liverpool are stupid enough to turn us down then that is their problem.

From a contract perspective, you should target players in the last 12-18 months of their contracts. Selling clubs will be desperate.

Power Law

How much value would a 100mm player add to your club?

If you are Real Madrid, he may add you 7-8 points over a season.

If you are Hull City, he may add you 15 points.

But if you are Hull City, how much difference would 5 x £20mm players make? 25 points? Or 10 x £10mm players? 30-35 points?

On the other hand, if you are Real Madrid, 5 x £20mm players would make little difference as they would be unlikely to be significantly better than those already there, and would spend much of their time on the bench.

So what is the best strategy?

You should honestly assess where you sit in the hierarchy. Clubs like Tottenham and Liverpool would be better off cashing in on Bale (particularly) and Suarez and buying several players in £15-£20mm range. Arsenal would be better off buying a couple of £25-30m pound players than spending £50mm on Suarez.

The point I am trying to make is that the premiums demanded for the very top players are only worth paying by the most elite clubs because of the value-added over the player they are replacing.

So, how would I assess Arsenal’s approach?

I believe they are much more in tune with the above than other clubs. However, I believe the key factor preventing the completion of high end signings is that Arsenal think that future transfer values will decline while other clubs either believe they will increase – or are only living in the present. The worth of any asset is what someone is prepared to pay for it. Nevertheless, I think that touted fees for players in their late 20s are completely unrealistic from a rational perspective.

Which brings me to the final point: football clubs frequently do NOT act rationally in the transfer market. The emotional pull of marquee signings (fuelled by fans and the media) will make clubs over pay. Just ask Leeds and Portsmouth.

It is difficult. And the situation wasn’t helped by Gazidis publicly stating that Arsenal had significant money to spend earlier in the summer – so, paradoxically, by him trying to keep fans happy (“this time is different”) he has actually made things harder! It seems that Arsenal have been in for a number of targets, but selling clubs are holding out for valuations above Arsenal’s. In some cases the stand-off is continuing (Suarez), in other cases players have gone elsewhere (Jovetic, Higuain, Gustavo). I suspect Arsenal are waiting for the selling clubs to crack, which will probably be very late in the window, if at all.

At least I can have some confidence that Arsenal are spending money carefully – I always think it is a bit rich fans complaining that Arsenal won’t pay the extra few million while at the same time moaning about the cost of their ticket. Arsenal’s owners have not taken money out of the club in my lifetime and, assuming this doesn’t change, at least I know the unspent money will be there for the future.

Related

71 comments to Football Transfer Economics

I agree with this to a certain extent. I certainly think AW is of the opinion that the market is inflated and will burst at some point in the future. He has said as much.

I think there are signs of the transfer market slowing down in some areas and it seems to be only a couple of big clubs pursuing the big players.

However it is still a massive gamble. The market is artificial. There appear to be more and more rich men prepared to through away their personal fortune on a football club (PSG and now Monaco as well). The larger these clubs become in number the less like the market is to collapse as they will simply be swapping their funds (with a little on the side for agents).

The danger for Arsenal is that if the current inflation subsists we will fall so far behind that if the market does collapse will we be in a position to capitalise on that? This tactic could perpetuate a decade or more of stagnation at the club on the playing side. I can’t see Kos etc hanging about for too long if we continue with this policy

Even more likely is, that even if this is AWs plan he won’t get to see it through. The pressure from fans will eventually be too much for the club to resist (its getting to that point already I feel) and a change of manager is likely. A new boss is likely to blow the funds we have accumulated meaning that we put ourselves in a much weakened position for now discernable gain.

This predicting the future lark is hard … safe to say my optimism is at an all time low

Excellent article. It’s the brainless fans that think they know how to run a football club and buy all the best players in the world who will make me give up my season ticket. They’re a disgrace and are actually damaging the club whilst claiming they know best.

It’s quite easy to see how much money Arsenal have got. You only have to look at the Swiss Ramble site. It’s not a secret that the club are swimming in money so Gazidis is not revealing financial secrets.

Yes it’ll be some consolation if we buy nobody because next season we’ll have nearly 200 million to spend. Then we can outbid everyone on any player we want.

It’s quite easy to see how much money Arsenal have got. You only have to look at the Swiss Ramble site. It’s not a secret that the club are swimming in money so Gazidis is not revealing financial secrets.

Yes it’ll be some consolation if we buy nobody because next season we’ll have nearly 200 million to spend. Then we can outbid everyone on any player we want.

Well written article I must say…buh all we fans want is results on d pitch. We dont get any penny from wat d club makes, so y not spend it on quality players..? players tend to drop in their 30’s buh who knows, spend big and u might get d player to play at his peak more years than expected. A perfect example is Rio Ferdinand of manchester united.

Top class article. Football market is like the housing bubble in spain and Ireland. Everything is overheated. Whilst Arsenal appear to be vacillating, there’s no pint spending money just for the sake of appeasing fans. I believe it’s going to work out over the season. We should stay competitive and in the next few years Arsenal are going to kick onto the next level, like Bayern. Arsene Knows

I enjoyed reading this article, and appreciate the points you made. I only have one quibble, regarding you find it rich that fans complain about stinginess in transfers and also complain about the price of their ticket. When the ticket prices are the highest in the league, don’t you think the two are not mutually exclusive? In fact, it seems to me that someone paying the most to watch a team will logically suggest, “I am funding this team with my money, why are you not spending it to improve this team?”
Especially given the cash balances available at AFC at this time.
One other thing, a lot of bloggers have said that Gazidis should not have publicly spoken about financial firepower. I don’t think that makes any difference in transfers, because most clubs are aware of the balance sheet of other clubs. Whether he said it or not, other clubs know we have money.
Still, refreshing to read an article that changed the subject somewhat, and not carry on about the recent defeat and the summer failures.

A great article. Well made points, and actually should act as a catalyst to think deeper about transfer rumours as well. Very well done.

I actually agree with rupert to some extent. The clubs that we are trying to buy from would know roughly what our financial capacity is, and unless they are privately owned and hence not subject to the same laws as a listed company, we would know there’s as well. Gazidis didn’t put increase the price directly by saying what he did.

He did however end up (probably) increasing the price for our targets indirectly. He made fans believe that we’re rich, and that we’ll buy some quality players. This in turn puts pressure on Arsenal to buy, and the selling clubs will exploit it.

However, I also have a feeling that it is possible Gazidis was actually speaking to potential targets when he said this. It might have been meant as an advertisement to all the players (or specifically their agents) that Arsenal are prepared to spend big, so remember to include us in any feelers you put out. Trouble is, it appears we’ve not been able to convince anyone to join. That could be because Arsenal’s image (not entirely their own fault) is catching up with them, or simply because CL football isn’t confirmed yet. Or both. We’ll see how it goes in the next couple of weeks. First task is to qualify for the CL.

Today we’ve been linked with Williams and Michu of Swansea which would cost us in the region of 35 million which is way overpriced for those two. Pogba of Juventus and Willan, the latter apparently before Spuds get him. Oh and Micah Richards.

If we sign the lot of them we might sneak fourth. Probably won’t get any of them and I’m not sure I’d say Williams or Michu, much as I like the latter, are super quality.

You can detract from the current situation all you like and look for a bunch of economic excuses that never worked for 8 years – it changes nothing. It is extremely suspicious when your house is on fire, and you have tanks of water, but still decide to wait for a rainy day – get my drift? When Kroenke decides to sell his shares (after goons like you finally accept it has been a ploy all along) who is going to pay for the money he borrowed to buy the club in the first place?

Was it not you guys at UNTOLD that gloated over the announcement Gazidis made about our so called financial fire power, and how we were going to spend on players of Rooney’ calibre? To date not a penny has been spent – only pretences made to bid for players we were never going to get (or never intended to get) – all a ploy by fraudsters to get gullible fans renew their season tickets. And Wenger was very much in that act as well saying: “I want to sign 2 top top players.” Before you wrote your economic drivel you forgot that Wenger has a Masters in Economics – did he not understand the current transfer market when he said he will buy one or two of the best players in the world? But we have been down this road many times before over the past 5 years: “Oh I have given Arsene plenty of money, but he is such a good bloke he doesn’t spend it” (courtesy PHW). Then Arsene replies: “If I want to I can spend £30 million on a single player.” Now do not tell me the price was not right, because in football transfers, the only right price is the one the seller is prepared to accept: only an idiot does not know that – nearly all footballers prices are inflated accept kids who come on a freebie.

Now back to Gazidis – he did say Arsenal had stagnated over the years!! Wow – nobody at UNTOLD ever supported that notion! What happened to the 4th place trophy? Wasn’t really quite a trophy after all was it! Yet I have been telling you guys from UNTOLD for the past four years that 1) Arsenal had stagnated and 2) Arsenal needed proper investments in their playing staff.

My short rant is pure and simple. Someone like AST should take legal advice to find out if these fraudsters have broken the law, and have a proper investigation of Arsenal’s finances and the board’ motives. If not concerted action should be taken to boycott the stadium and all Arsenal commodities until we drive the greedy lot out of North London – if there is no money to be had Kroenke and his cronies will go. They can take Wenger with them – he is too tired and old to maintain his job, and is in with the lot of them.

He went into the new season with just 2 central defenders when we have been linked to people like Rami and Williams long before the transfer window opened. Why does the incompetent fool not play a balanced team e.g. get a defensive midfielder? We were linked with Wanyama, Bender and Fellaini but nothing happened. Instead he puts Ramsey in the holding role, who later became a central defender!!! Even I could manage and coach this team better than him.

I purposely avoided sky and the print media yesterday as i couldnt bear to read the sanctimonious “told you so” assertions of the various pundits as regards arsenal’s depressing opening day defeat.Its only the opening day of the new season and by beating fulham and rottenham well have a point more than we did after three games last year.The squad however is looking a bit light what with these injuries so with any luck wengers repeated comments about pursuing quality players may prove to be more than hot air.As a postscript,Suarez and Rooney are not us and we are not them

Very well written article Pete. If only the average supporter understood economics the way we do they would see the value in how Arsenal does business. They want to crucify the most intelligent manager in EPL history over a lack of trophies and so called ‘marquee’ signings but fail to see how he has done miracles without having to resort to the steroid injection approach so popular these days.

Nice article. We have, arguably 2 players in the 20-25m range, Jack and Cazorla. The rest are somewhere between the 2-15m range (Kos might be worth more). Beyond the first team, it is arguable whether our resrves are even in this band. In contrast, Man U, Chelsea and Man C have several players (including reserves) in the 20m+ range. We need to lift the average up in terms of quality, ie buy 1-2 players in the 25-30m range every year. After a few years we will be somewhere near the others (if we don’t sell them!).

I cannot understand why we haven’t stretched the budget a bit this year. We allegedly have the money and the players have been available (sorry Arsene, they have been). Sometimes we need to not make money as a club and possibly stretch to breaking even or, call me crazy, lose a bit of money? Its not unheard of in football.

I cannot believe that this is Wengers fault. The club relies on several people and a board to steer it. So what is the real story? Do we have the money? Has the sale/release of so many players not released some cash? Is the stadium debt really a large albatross around the club’s neck? Is the board being disingenuous? I suppose I will have to wait for Wengers autobiography to find out what is really happening.

That’s an excellent article and an insightful look at how a transfer policy, albeit a subjective preference in how to budget for success, may or may not influence a club’s fortunes. However, it is that exact approach that has held back the club from being competitive. Each year the club uses that approach to player recruitment is followed by the club moving further away from titles.
Refusing to buy players because they ‘do not offer enough value for that price’ is, of course, logical but simply not an ambitious viewpoint. The first question should be ‘will this player improve our starting 11?’. Then, can we afford him. Then go and get the deal done.
Of course there is a need to be sensible but refusing to pay an extra £1.5m for Mark Schwarzer its clear that the existing keepers just weren’t good enough is quite frankly beyond ridiculous. There are countless examples of that approach.
I don’t agree with your idea that it’s better to keep the cash and buy better players next season. Firstly, look at how Spurs and Liverpool have strenghthened with real intentions of 4th place in mind. How on earth do you attract top, top players to clubs that aren’t competing for titles let alone not playing in CL? Secondly, why save cash for the sake of it? If you can improve a team that has struggled to make 4th position recently then do so and if you do finish 2nd then it’s progress. Next season will be easier to recruit players who believe they will be the difference between 2nd and being champions.
The problem appears that the approach to player recruitment is purely from a business standpoint and less from an ambitious football club point!

I agree about Michu and Williams not being ‘exciting’ players. Especially after being linked with a different caliber of players all summer. However, if Suarez doesn’t move, what are our options? Michu is Suarez-lite in a sense.

Ashley Williams I’d be ok with because I’m generally happy with Mertscielny, and there is very little chance a top defender would want to join in a World Cup year to start as 3rd/4th choice. Besides, Williams is similar to and can push Mertesacker because Kos and TV can replace each other, but they can’t really play with each other.

As for Cabaye. I have to admit to feeling underwhelmed if for no other reason than the fact that it looks reactive. Especially because we didn’t sign him earlier when seemingly we could have. I hope, if we are indeed looking to sign him, then it is a reaction to Ox’s injury, and that we still get our preferred midfield target. (Bender?) Would be unusual, but you never know. There is something odd about this summer.

I still feel that qualifying for the CL is crucial. If we’re looking at players from other CL clubs, then they are likely to want CL football at their new club.

I do disagree about sneaking 4th. Our first 11 is a good unit. With the possible exception of Giroud, I think we don’t need immediate starters. We just need to ensure enough bench strength for there to be no noticeable drop off in quality. Especially, Arteta’s successor.

I particularly applaud you for not giving up on addressing this tranfer issue. I won’t be surprised though if your analysis falls on deaf ears. Nothing like confirmation bias and last Saturday was a great day for the gloomers and the buy-buy-buy brigade. Never mind the fact the result has nothing to do with buying players. It’s a one-size-fits-all argument for the gloomers.

please,please,please dont give wenger any money to buy more dross,lets be honest he is a spent force,his methods and ideas are outdated he never moved with the times,he will be unable to change lets be honest it is hard for any grown man to change,he believes sadly that his approach is correct,he should go now on his own terms so as not to tarnish his legacy which at the moment is still intact,ie,stadium and london coloney,unbeaten prem league season,etc.Gazidas and wenger are obviously not singing from the same hymn sheet there seems to be a lot of mixed messages coming out of the club.Who in their right mind would walk into a market and shout at the top of their voice “hey everybody shush guess what I have 80 million to spend”that is just amateurish its what you would expect from pikeys after a lottery win.coyg.

Well done Pete, transfer economics for dummies ( of which we appear to have more than our quota).
At least the names being mentioned on dispatches now (Michu, Williams etc) are quality and hopefully achievable.
Micha Richards ??? Nah. Seamus Coleman of Everton would fit the bill better for me (but what would I know ?)
Roll on Wednesday for a good result and onwards after that.

Michu is the Spanish equivalent to Berbatov, should this be true, Arsenal are willing to pay 25mil. Chelsea total business this transfer window is 28mil.

underwhelmed by Cabaye is an understatement, all summer we’ve heard nothing but quality/top/right player, which have accounted to zero spent and minimal investment with the likes of Sanogo. Denial is very dangerous, the board/manager have made it quite obvious their plan was to lead us on. If transfer request for the services of Cabaye is true and follows through regardless of the rejection thus far, this only shows money is everything to the current setup.

Suarezgate is very much been in the public’s eye, for second imagine Suarez was an Arsenal player and Liverpool made a supposed bid. Do you honestly think our board would of dug their heals or would they have pricked their ears and drooled at the 40mil being quoted?

You are comparing chalk and cheese. Let Liverpool build a stadium and be entirely self financing and we’ll see how into the ground their heels actually went. In fact, I am still not convinced Suarez will stay with them even now.

I think when Arsene Wenger talks of “Super quality” signings he is actually addressing his present squad.

For instance. If he was to say he needs players because the ones at his disposal aren’t good enough then you end with the desperate scenario that idiot Stuart Pearce found himself in during the U21 Championships this summer.

And we haven’t received an offer of 40m to reject it to prove to you that we would also dig in our heels 🙂 We have though, bid over 40m. That is something which I didn’t think would happen with Arsenal despite Gazidis’ statement, and I suspect, neither did you.

Arsenal were probably at fault of believing that Suarez’s clause was a release clause (it still might be for a CL club, but I’m not counting on it) and this might even have cost us Higuain’s signing. Not good at all. But understandable that we tried. We won’t make the same mistake again though.

Arsenal can compete (pretty much) with the top dogs now. There is no way that wage bill clear out happened for no reason. We’re looking to pay players and pay them wages we never would have before. We have to get the players and their clubs to agree. Money isn’t always the answer in that regard. Unless you have unlimited funds, which we don’t.

The Medical Division of UA strongly advises calm and to take things easy .Always keep smiling – it pisses off your enemies ! Take time off to read this and enjoy.G’night !
From – http://medicalhumour.wordpress.com/

Humour has the potential to relieve stress in patients and medical professionals. Humour gives patients the opportunity to forget about their anxiety and pain, if only for a brief period of time.
When doctors share humour with patients, they create lines of communication that encourage patients to discuss difficult issues.
In effect, humour can put both parties at ease in a way that more formal types of communication cannot.

Yes. Indeed they were the only ones running to the public about Suarez. A club that doesn’t intend to sell doesn’t reveal bids being made and then fix price tags of a sort on the player in public. However, they also have the possibility of holding on and hope they make top 4, and the sell Suarez for even 25-30m and make a profit off of it. They can do this because Suarez has 3 years left on his contract, is 26 years old, and this is a world cup year. It seems they might have opted for the latter option (although if a 45m bid came in from Madrid I think they’ll sell post haste), but no one should be under the illusion that it isn’t about money. Football is a business. It’s always about the money.

One of the strangest articles I have ever seen. I can only think you are AW and I claim my £5!
The trouble with your arguments are that football matches aren’t played out on a spread sheet they are played on a pitch and every player purchase comes with risk. Ok I go with the point about players ages but in truth a club like Arsenal shouldn’t be swayed when signing a player by looking at the players probable resale value.
There’s an old saying you have to speculate to accumulate but reading this article I can only read that there is a suggestion that unless performance/age etc is guaranteed the club are right to steer clear of a player
Whilst I wouldn’t want Suarez anywhere near my club you suggestion that its an either or situation at Arsenal surely as Arsenal have stated they have a vast pot of money in the scenario you outline they should be looking at the buying the £50 million player plus 2 more at £25 million each

I said it yesterday and I say it again, as soon as we actually do sign a player(s), the whingers will still complain that he’s the wrong man, the wrong price, the wrong age …..
Give me Michu over Louis Le cheat any day. I’ll be surprised if Swansea let him go though, having said that, they must have expected some pressure for his services after his performances last season. Bony looks a decent replacement for them perhaps. Cabaye can do a decent job for us should he arrive, not a superstar, but still the kind of player that could add the depth we need.

@Shard, I liked Michu last year and thought he was a great buy at 2 million (was it?). But I’m not sure I’d be too happy if we fork out around 25 million for him. I was championing Bony on here and we could have had him for less than 20 million. I would have thought that would have made more sense. Williams I’m not convinced by at all.

Now perhaps we didn’t go for Bony because we were aiming for Higuain. And since then we’ve wasted time on Suarez.

I have to say I don’t know what other striking options there are but I’m sure one or two on here could enlighten me on other potential targets around the world.

As for Cabaye I also think this is a reactive measure. Very underwhelming but then I have to be fair and say I’ve not scrutinized his performances.

It was a big disappointment to lose the game on Saturday. We started the game well and then suddenly everything went against us so it is a big blow. Not only did we lose the game but we have a few injuries and many kicks. However, we had some lively moments and kept going until the end and that’s what we have to focus on and forget the referee. Even when we had 10 men we had chances to come back to 2-2.

We were all very disappointed. We want our fans to be happy. When you don’t achieve that, you feel absolutely sorry and really disappointed.

In terms of transfers, we were on the market before the game and we are on the market after the game. But I have to look at the solution at the start of the game. Could we have won the game with the players we have? I say yes.

We take our work seriously and believe me, we analyse every single player in the world. We work 24 hours a day for that. When we make decisions, we take it seriously. People try to think we do not want to spend. We want to. We are ready to buy players.

The team are now focused on Wednesday night and getting a positive result against Fenerbahce in Istanbul. It is a crucial match of course, and we will give everything we can to succeed there.

A different tack. We have been allegedly looking at different Gks for years now. Last year Lloris was sold for c12m, Stoke bought Jack Butland because he thought he would be getting first team time as the expectation Bergovic would be sold. Liverpool went for the cheaper option with Mignolet. He is still there. Can anybody provide a link to stats which shows Scz to be better than Bergovic. This is not having a go at Scz, while he may well have been good enough for where we were financially, is he good enough for where we want to be?
Winning starts from the back, wiser men have said this before me, and it imo is the only position on the field that should be non negotiable, ie blocking someone’s progress. After saturdays result can anybody say with confidence that Scz will not be making silly mistakes in future.

So let’s get this straight. We go from Jovetic and then Higuain either of who I would have been happy with, then on to Suarez and possibly Rooney. We get knocked back on these and then we are rumoured to go for Michu. Good, but hardly awe-inspiring. Does he take us to the ‘next level’? Is he ‘top, top super-quality’? We could have gone for Gustavo or Fellaini – but instead we go for Cabaye. is he good – yes, but same reservations as above. Deja vu – another trolley dash acquiring good, but not good enough. So waht about the promises of going to the ‘next level’ and looking for ‘quality not quantity’. Oh dear, i would have been disappointed in Michu & Cabaye before Ivan spoke about the burgeoning £70m war chest waiting to be opened.

Today we have a new raft of player names that we are being linked with. The likes of Michu and Williams have been mentioned before. The total list of media linked names during this window must be over 20 but only Higuain and Suarez seem to have been seriously pursued.

Now so close to the end of the window and with the impetus of our injury list, any new player is likely to be tagged as a ‘panic buy’. Equally their existing clubs will be in a strong position price-wise. On the other hand and as with most of the previous linked players they may be pure media creation.

The situation has changed from the start of the window where we were supposed to be looking for the 2 or 3 top players that would take us forward to be genuine title challengers into backups for our walking wounded.

For whatever reasons we are having to play catch up in the market now. Its looking more like quantity than quality unless they really have an ace up their sleeve.

@ Rupert & Shard – Just found this condition ,which may interest you .

Funny Medical Abbreviations For Doctors

HP – Hispanic Panic, used to describe a Hispanic patient who believes their condition is worse than it actually is.
This is generally a result of the perceived over-dramatic and theatrical nature of many Hispanic cultures.

Pete, your article makes far more sense, than anything The Swiss Ramble has ever written about The Arsenal.

The Swiss Ramble, like so many who write about The Arsenal finances, lacks any practical experience of working as an accountant. In other words, he is not “one of us”!

Ivan Gazidis has never quoted a number for the Transfer Budget. My own view is, that Ivan is “over the moon”, because of a new Banking Agreement with the Bond Holders, has now been agreed.

The source for this, actually digging into the Arsenal Football Club Plc, Directors’ Report for 31st May 2013. D. Miles, Company Secretary, writes on the 16th November 2012, I quote:

“The Company’s bank facilities are not currently due for renewal, however, the Company has held a discussion with it’s bankers about these facilities and no matters have been drawn to its attention to suggest that renewal may not be forthcoming on acceptable terms”.

It will look like gobble-de-gook to the great majority of you, that is only to be expected.

@Kenneth Widmerpool
Taylor is being rested as he is 1st reserve for Dean in our match against Tottenham. Apparently Riley was so pleased with Taylor’s performance last Saturday that he has promoted him into the ‘kick Arsenal in the bollocks’ select group. I have it on good authority that the select group which consists of Dean, Probert and Taylor will be doing ‘rotational’ reffing in all our matches this season.

It is a bit naive to expect that FFP or European economics to result in lowering player valuations. At best(???) they may slow down EPL market growth. What it means is that your (as in Arsenal FC) pound buying power will continue to drop but at a slower rate. Looking at historical precedents in other markets in order to make any significant dent in player valuations the EPL market needs to contract at least 20-30% in a short period of time which may trigger a chain reaction resulting in total market collapse to pre-EPL levels.

Another way to look at EPL market growth projections is to compare it with the US major sports leagues. In 2011/12 the total revenue of EPL clubs was £2.36B. At the same time MLB revenue was £5B and NFL revenue was £6.5B. Given EPL growth potential due to increasing global exposure and lack of any meaningful competition from other sports (e.g. NFL has to compete with MLB, NBA, NHL and recently MLS) it is not unreasonable to expect EPL market to match MLB and NFL in the next 10 years. Essentially it means double if not triple increase in EPL market size before the bubble finally bursts. I don’t think should expect increases in player valuations of similar magnitude. But it will definitely create significant inflationary pressures and most importantly Arsenal will see more and more ‘lesser’ clubs competing with them directly on the player market.

really interesting read Pete, thanks. One point though, if we are to spend wisely shouldn’t we actually buy early? make bids for players we want – offer at a reasonable price and tell the target club that we want our business done quickly and without publicity; for that we are prepared to pay a little more.
There does seem to be a problem in closing deals and while I don’t blame personally, I would ask the club if they could improve the negotiating team for the future.
As lots of people have noted buying players in the next week or so will inevitably mean we pay more, or don’t get the targets we want.

It was interesting to read about John Cross saying that the bid for Cabaye was actually made on Friday, which shows how really pathetic Pardew was by blaming AFC for approaching the Toon supposedly on Monday,and disturbing his teams performance,- after City thrashed them it must be noted(!)- Wenger made no mention of this at all,when quizzed today when he easily could have.
I wonder if this will be reported by the media? Probably not,as whipping Arsenal is an enjoyable media sport, which reaches a crescendo in the pm, but dies down in the evening( media wise)if you look closely!
Its similar to the Ox contract story, the whole 200 grand crepe is just a part of the contractual add ons, but unless youre in the know, its just another attention-grabbing sensationalist headline aimed at undermining the club,these things lodge in peoples minds and only add to the climate of hysteria.
I suppose we should pity Pardew for making such a lame excuse!What was his excuse last season?

Please note the the RSS feeds do not work in Chrome. Please use IE, Safari or Firefox